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Earnings Release and Financial Results Q1 FY 2017:Siemens continues on road to success – earnings outlook raised

01 February 2017

"With a strong first quarter and a considerably raised outlook for fiscal 2017, we are sending a clear signal. I am proud of my global Siemens team that has been working hard and has delivered convincing success. We will continue to rigorously execute our strategy program Vision 2020 to even further strengthen our innovation power and customer proximity."
Joe Kaeser, President and Chief Executive Officer of Siemens AG

  • Benefiting from a strong performance by short-cycle businesses, revenue up 3% on a comparable basis, excluding currency translation and portfolio effects

  • Orders 14% below Q1 FY 2016 on a comparable basis; the prior-year quarter included a higher volume from large orders

  • Order intake continues to exceed revenue resulting in a book-to-bill ratio of 1.02

  • On a nominal basis, revenue 1% higher at €19.1 billion; orders of €19.6 billion, down 14% compared to the prior-year quarter

  • Significant margin expansion in most industrial businesses due to strong operational execution, and a €172 million portfolio gain, take Industrial Business profit margin up to 13.0%; Industrial Business profit climbs 26% year-over-year, to €2.5 billion; Centrally managed portfolio activities posted profit of €0.4 billion

  • Net income of €1.9 billion, up 25%; basic earnings per share (EPS) of €2.35 compared to €1.89 in Q1 FY 2016

  • Currency translation effects took one percentage point from order and two percentage points from revenue development;portfolio effects had a minimal effect on volume development year-over-year

  • Compared to strong order intake in Q1 FY2016, orders down to a lower volume of large orders

  • Industrial Business order backlog was €115 billion

  • Revenue Increased in the majority of industrial businesses

  • Profit Industrial Business:higher profit in nearly all industrial businesses;Digital Factory posted the highest profit and largest increase, benefiting also from €172 million gain related to the eCar business which was contributed to a joint venture; Healthineers and Power and Gas also contributed substantial profit along with strong earnings growth

  • Income from continuing operations: higher Industrial Business profit and a pretax profit contribution of €409 million from Centrally managed portfolio activities (CMPA);Q1 FY 2016; improvement was due mainly to Energy Management, Mobility and Wind Power and renewables

  • Strong working capital management drives €1.4 billion positive swing in Free cash flow; Free cash flow from Industrial Business increased to €1.286 billion from €68 million in Q1 FY 2016; improvement was due mainly to Energy Management, Mobility and Wind Power and Renewables

  • Higher net income, substantially increased ROCE, despite a moderate increase in average capital employed

Outlook

We anticipate increasing headwinds for macroeconomic growth and investment sentiment in our markets due to the complex geopolitical environment. Therefore, we continue to except modest growth in revenue, net of effects from currency translation and portfolio transactions. We further continue to anticipate that order will exceed revenue for a book-to-bill ratio above 1. After a strong start into the fiscal year, we raise our previous expectation for profit and EPS for fiscal 2017. We raise our previous expectationfor the profit margin of our Industrial Business in the range of 10.5% to 11.5% to the range of 11.0% to 12.0%. Furthermore, we raise our previous expectation for basic EPS from net income in the range of €6.80 to €7.20 to the range of €7.20 to €7.70.

This outlook assumes continuing stabilization in the market environment for our high-margin short-cycle businesses. It further excludes charges related to legal and regulatory matters as well as potential burdens associated with pending portfolio matters.


Elisavet-Vasiliki Sachinidou 

 elisavet.sachinidou@siemens.com